Generation start-up: Tamara from Saudi Arabia plans to expand beyond MENA region
Abdulmajeed Alsukhan does not hesitate to take up challenges. The serial entrepreneur, a cancer survivor, has built one of Saudi Arabia’s fastest growing startups, alongside co-founders Turki bin Zarah and Abdulmohsen Albabtain.
Tamara – a company that buys now, pays later – raised $ 110 million in early stage venture capital last month and intends to establish a presence in all of GCC’s markets. The founders’ next mission is to expand into the Mena region, Southeast Asia and other emerging markets.
Mr. Alsukhan’s one-year battle with cancer at the age of 26 has changed his outlook on life, including how to face challenges, persevere, and make the most of any given situation.
“I’m doing this because of the challenge. I tell people to create a start-up, it’s like climbing a mountain, ”says the CEO of the start-up. The National.
“Yes, the goal is to get to the top, but you enjoy the trip [as well] and if it’s not a challenge, it’s not worth it. “
Tamara is one of the many successful start-ups tapping into the buy now, pay later space that has become popular as consumers manage their disposable income amid the Covid-19 pandemic.
Tabby, another Dubai-based start-up offering the same service, secured $ 23 million in funding from investors including Mubadala last December to fuel its regional expansion.
Tamara is not Mr. Alsukhan’s first business. After earning a master’s degree in economic policy from Boston University in the United States, he joined the investment department of the Saudi Central Bank, but left within six months to start his own business.
Mr. Alsukhan bought a few bicycles and set up his first independent business, Habli – a last mile delivery business, which he started by delivering goods himself.
The business was successful, he said. However, her mother “was in shock because it’s not something you do after going to school. [in the US] for eight years ”.
He then embarked on a new challenge as the co-founder of Nana – one of Saudi Arabia’s leading online grocery start-ups – by buying out his delivery business.
As the CFO of Nana, he focused on fundraising, strategy, business development and partnerships.
He has worked closely with investors and the online grocery startup has raised record amounts in seed, seed and growth funding.
The company has so far raised around $ 29 million from investors, according to Crunchbase, including $ 18 million in a Series B round in March of last year. This experience was useful for Mr. Alsukhan when he created Tamara.
“During that time, I was exposed to what the ecosystem was missing. One of the biggest barriers to buying and selling online was payments … and the second was credit, ”he says.
Inspiration for Tamara came from the registers of neighborhood grocers who kept records of goods sold to local customers and payments due at the end of the month.
“These guys [grocers] had one thing in common: they knew their customers. They didn’t know their financial situation like a bank does, but they did know who they were, where they lived, their families and even their habits, ”he says.
Local stores used this information to extend lines of credit to customers in their neighborhoods. The move was convenient for customers, who didn’t have to pay cash after each transaction.
“It fascinated me. I took the idea well, I studied it well and I found that … [with technology] I might know customers more than these guys, which means I can expand these little payment solutions… served in the retail industry, ”he says.
I am doing this because of the challenge. I tell people to create a start-up, it’s like climbing a mountain
Abdulmajeed Alsukhan, Managing Director of Tamara
Its target market included malls, fashion chains and beauty stores, where discretionary spending was high. Customers were offered the option of paying for their purchases in installments over a short period of time to “take the pressure off their wallet,” he says.
After Nana reached a phase where she was well capitalized, Mr. Alsukhan decided to leave the company and create Tamara. He teamed up with Mr. bin Zarah, who previously worked with companies such as LinkedIn, Strategy & and Kearney.
“I am a very pragmatic person. I know what it takes to win. I called those I knew I could partner with and I had what it took to [succeed],” he says.
The two partners assembled a team of technology experts and began developing the product and systems in February of last year. The third co-founder, Mr Albabtain, joined them later and Tamara began operations in September of last year, amid the pandemic and an economic downturn.
Mr Alsukhan said Covid-19 accelerated the establishment of the business as people worked more efficiently and held remote meetings with retail partners, which would have been difficult to achieve under the circumstances. normal.
Tamara is now one of Saudi Arabia’s fastest growing purchasing and payment service providers, with its user base increasing by approximately 180% per month and transaction volumes increasing by approximately 170 % per month since the start of its activities.
Its base of over 1000 merchants includes Saco, Nice One, Whites and Nejree in Saudi Arabia. It has also expanded its services to the United Arab Emirates, the second largest Arab economy, through online retailer Namshi and others.
The company serves traders of all sizes – from small traders to retailers selling billions of dollars in merchandise. He currently focuses on clothing, beauty, electronics and home accessories.
Tamara offers customers the option of splitting payments into three installments over 60 days or paying for items 30 days later. Customers do not have to pay any additional fees on their purchases. Tamara pays traders on behalf of customers and takes fees from sellers.
“The seller essentially offers a service to buyers by offering them [the chance to] buy now and pay later, ”he says. “We pay them and take all the risk on behalf of the client.”
A default occurs “very rarely” and most customers want to pay.
“There’s no question about it,” says Alsukhan.
Tamara rigorously follows the Know Your Customer process and has “secret sauce” based technology tools that help her minimize fraud and credit risks, says Alsukhan.
The company, the first company to buy now, later pays to enroll in the Saudi Central Bank’s sandbox program, was initially seeded, with “everyone investing a fair amount of money.”
Tamara closed a $ 6 million first round of funding in January, five months after its official launch. Its $ 110 million growth funding, led by UK payment technology company Checkout.com, was among the largest in the MENA region.
This investment will help it expand into all GCC markets by the end of this year. He is already settling in Kuwait, says Alsukhan.
“I don’t expect our growth to slow down until we have most of the [merchant] the partners [on board] in the region and has spread to most geographies, ”he said.
“We have many geographies to cover … we believe this business and our capabilities are designed to go beyond the GCC.”
In terms of growth, “the sky is the limit,” says Alsukhan. Tamara’s strategic partnership with Checkout.com will help it scale up its operations.
The “buy now, pay later” business model is capital intensive and new financing will help eliminate any capital mismatch.
“The bigger you are, the more money you need and that’s why we have a strategic partner on Checkout.com,” he says.
The funding will also help him “build the best team the region has ever seen, not only in talent, but also in attitude and culture.”
Q&A with Abdulmajeed Alsukhan, Managing Director of Tamara
What is your vision for the company?
To become a global, customer-centric company that prioritizes the financial well-being of our customers in Saudi Arabia and beyond.
Which successful start-ups would you like to have started and why?
I have co-founded several start-ups in recent years, including Habli in 2017, which was acquired by Nana the same year. I then joined Nana as a co-founder until 2020, when the idea of Tamara became a clear need and a passion that I had to pursue.
What new skills did you acquire when starting your business?
Perseverance. Creating start-ups is hard work; you need to have the courage and determination to be successful.
How do you see a post-Covid-19 world?
The duration and severity of the pandemic has resulted in significant adoption of online commerce and solutions. Even as the pandemic abates and people return to the world, online shopping will remain a significant part of retail sales and there is a need to vary payment solutions to make this transition more resilient.
We also believe in bringing digital payment solutions to physical stores through Tamara’s consumer app. This will be a key growth pillar and we plan to create more solutions for customers and in-store merchants.
Where do you see Tamara in five years?
A leading regional financial inclusion service provider and consumer app in the MENA region.
What is your mantra for success?
Success can only be achieved through persistence.